Hottinger Stock Timing and Swing Trading Signals

Dear Fellow investor,

It has been our policy, for almost 10 years of operation, to consider ourselves solely a financial information website, and to refrain from taking or stating a position on any political matter.

Tonight we part from this policy to share with you a very deep concern: our country is about to embark on a Health Welfare program that, if enacted as currently written, will change forever the fundamental economics of the United States - - - and will undo much of what you have worked so long and hard to build into your portfolios.

I urge you to read this article by Charles Krauthammer, and then to address your concerns to your Senators and Congressman.

http://www.investors.com/NewsAndAnalysis/Article.aspx?id=513541

This author has put forth, IMHO, a very reasonable approach to solving the health-care problem. I hope you will find yourself in agreement, and will forward your thoughts and messages to friends as well as to your representatives in Congress.

Respectfully,
Fritz H.

Dear Fellow investor,

Well, they did it! They pushed the Dow back up over that magic number of 10,000. (Let's save for another time the questions of why is that level so important, or what is the euphoria behind this sudden boost.)

More important tonight is the question "What is going to keep it there?"

A few days ago I published on my SeekingAlpha blog a chart showing that the Dow does not rise when unemployment is rising. And it should be obvious to all serious investors and traders that if employment is rising at all, it is only in the government sector - - - and perhaps many of those jobs are just part-time, like collecting a crowd to stand behind our President as he gives us his latest words of wisdom.

According to a Wall Street Journal article dated Oct 5, the unemployment rate is now bouncing against the 10% level. Private-sector payrolls are lower today than at the end of 1999. The U.S. needs to replace 7.2 million lost jobs, and population growth will require another 100,000 new jobs a month. Where are these going to come from?

Are tire manufacturers going to bring back to the U.S. their overseas plants so they can re-employ union workers here? Probably not until there are stringent tariffs on tires made in all the countries besides China. And that will precipitate a trade war, which is more likely to boost inflation than it would the Dow.

Are the steel mills in the rust-belt of Indiana, Ohio, Pennsylvania going to re-open and re-employ Steelworker Union members? Certainly not in the next five years, and more likely, never again. Those jobs are gone forever.

Right now our country is facing one of the most important political debates in our history: Shall we, or shall we not, have government-mandated health care?

The plans being debated are extremely complex, and only the Lord knows what will come out of the "sausage-maker machine" or what the ultimate cost will be. But it will be a safe bet that: you will not be allowed to purchase health insurance across State lines; and legal harassment of doctors and hospitals will be allowed to continue. So much for "cost containment."

At the risk of sounding overly-skeptical, one cannot help thinking that it is in the best interest of the Obama Administration to have the country smiling and euphoric as this historic debate on health-care winds down to its final vote. And what better way to create some euphoria than to boost the Dow back up to an historic milestone.

Those who doubt the ability of an Administration to "paint the tape" so to speak, should review the origin and continuing existence of the President's Working Group on Financial Markets, the PWG - - - otherwise known as the Plunge Protection Team or PPT.

The PWG/PPT includes the Secretary of the Treasury, who serves as its chairman, and the Chairmen of the Board of Governors of the Federal Reserve System, Securities and Exchange Commission, and the Commodity Futures Trading Commission.

Despite President Obama's pledge to run an open and transparent administration, the activities of this Group are not being disclosed. Since disclosure could only prove or disprove government intervention in the market, the shroud of secrecy can only add credence to the interventionist theory. And what are we to make of it if it is true?

This bubble will burst eventually, like all bubbles do. Even a government the size of ours cannot levitate a stock market indefinitely. There have to be earnings, or at least the expectation of them, to support stock prices. Yes, those companies selling goods overseas will show increased earnings as the dollar falls against foreign currencies, and gold, and oil. But as the dollar falls our imports become more costly, and in most economic texts this leads to inflation - - - unless of course we take a pledge and renounce all imports. Not very likely!

In spite of, or perhaps because of, this latest run-up of the Dow, our crystal ball is showing stagflation on the horizon, that ugly combination of inflation and continuing unemployment. To quote from Wikipedia: <<< - - - central banks can cause inflation by permitting excessive growth of the money supply, and the government can cause stagnation by excessive regulation of goods markets and labor markets. Together, these factors can cause stagflation; >>>

To this writer's eyes, both these factors are already well in place.

The money supply has been increased beyond all previous records. Government debt is projected in the trillions so money supply cannot be reduced unless the U.S. eventually reneges on its pledge. (Bernanke's mop-up plan is still just a question-mark.)
Excessive regulation has already been set in motion. On the international front read latest on tariffs imposed, and lack of follow-thru on pending trade agreements - all in payment to labor unions for their support in last November's election. On domestic front read daily outpourings of the pending health-care legislation and its most probable impact.

Given these stark facts, prudent investors should be selling into this bubble. And while traders might be long for the short-term, they are certain to weight long-term trades to the short side. If ever there were a time for CAVEAT EMPTOR to be printed on your screen, it is today!

PS// With this kind of volatility your E-Zones are more important than ever. Take profits in the Exit Zone - - - and if you are buying, make certain that price is in the Entry Zone and that short term tend line has improved.

Dear Fellow investor,

An early CNBC headline today (10/6/09) read: Stocks Power Upward!

Then came others: "crude is higher, greenback lower, dollar under attack," "gold hits all-time high." What are we to make of these confusing and contradictory claims?

The primary purpose of our Seeking Alpha columns and threads is the sharing of financial information, without digressing unduly into political discussion and debate.

This writer has found it almost impossible over the past several months to comment on either current market conditions or future direction without trespassing into the political realm, and thus gave himself an extended sabbatical.

Today these reservations are being abandoned - - - there is just too much at stake not to speak out. As this is being written the Dow is up 157 points after gaining 112 points yesterday. And now it rests (comfortably?) above 9700. What will keep it there is anyone’s guess!

But let’s posit a few:

continuing investor exuberance
. . .(based on more promises and more hope?)
continuing US government largesse for the next needy category
. . .(bailed out banks, homeowners, auto mfrs, clunker-owners = I’m next)
continuing purchases of US paper by our major debt-holders
. . .(China cannot shoot itself in the foot; they want us as consumers of their exports)

On the other side of the scale, weighing much more heavily IMHO, are some economic facts difficult to ignore:

Unemployment rate is now bouncing against the 10% level
Private-sector payrolls are lower today than at end of 1999
US needs to replace 7.2 million lost jobs, and population growth will require another 100,000 new jobs a month (WSJ/10/5/2009)

The Dow does not climb when unemployment is rising. See Chart

This latest charge by the Dow has ambiguous origins, and is not to be trusted. Cautious investors and traders will keep in mind that the Treasury still runs the PPT (Plunge Protection Team), and does not have to disclose its activity in the market. Statistics from government agencies, regardless of the administration in power, are often slanted to produce desired results. One egregious example: Need to reduce budget deficits? Just remove food and energy from Consumer Price Index, thus reducing future Social Security outlays.

Political considerations can no longer be ignored. They impact the marketplace severely. This Administration has frightened the public with its oratory and ubiquity, and with promises that intelligent investors know cannot be kept. With true unemployment rising and unlikely to decline any time in the near future, consumers are tightening their belts and their purse strings.

And they are not likely to relax their grip any time soon. Their fears of what this Administration could do are many:

airwaves are filled with unsupported statements rendered as fact;
unkept promises of transparency and openness, bi-partisanship;
pay-offs to labor unions, trade groups, financial backers; trial lawyers, etc;
trade agreements altered or abrogated to benefit constituencies;
a visible trend to "Chicago politics": to secure power create dependencies that can deliver votes;
demagoguery of the Health Care Plan (17% of our GDP) with no solid answers to legitimate questions;
39 Executive Branch czars (at last count), not vetted by Congress.

This list could go on and on, but by now you should have the drift - - - there are just too many reasons to be doubtful of what this Administration will do to the economic fabric of our country, in both the short and long run. The investing public will not be fooled in the long run.

Now is the time to SELL High - - - take advantage of it. Take some money off the table while you have this opportunity. The time to BUY LOW is sure to come. One more glance at the chart above should be all the proof you need.

PS// Wise investors use times like this to add a contra to their portfolios. We particularly like SDS, which HottingerSignals holds and trades.

Dear Fellow Investor,

At the risk of being labeled a perpetual pessimist, or a disciple of Dr. Doom (Nouriel Roubini), let me offer a few words of caution tonight.

Do not allow yourself to get swept up in the euphoria that comes with those 3-digit upward bounces of the Dow we have seen lately. Recognize them for what they are. Some, the naturals, are the result of normal market restructuring - - - the ebb and flow of demand and supply. But these do not come frequently.

Others, especially those that begin in that last hour prior to market close, could be attributed at least in part to manipulation. You can read more about it here:

www.ustreas.gov/press/releases/hp1177.htm
http://registeredrep.com/mag/finance_stock_markets_da/
http://www.financialstability.gov/latest/hp1177.html

For those of you with a deeper sense of foreboding and perhaps a case of "administration mistrust", we suggest you familiarize yourself with the "Cloward-Piven Strategy" if you do not already know of it. I am quite certain Rahm Emanuel does.

www.discoverthenetworks.org/groupProfile.asp?grpid=6967

At the moment the market appears healthy, the Dow resting significantly above the 8,000 level where the PWG/PPT seems wont to keep it. And there are other positives in the air: the Administration is promising goodies by the basketful, all to be paid for with future savings. Government economists are telling us it has been a "V" shaped recession, and that we are on the road to recovery, "even though employment may continue to lag".

Against these rays of sunshine, it does appear some clouds are forming. And if enough of them align themselves, we could be in for a "perfect storm".

In reply to the government spokespeople, other economists, pessimistic and otherwise, liken this recession to a deep "U", or to a "W", or an "L", or even an "X", from which there will be no immediate release.

The current Administration in DC is pumping out dollars as fast as they can be printed. The word "trillion" has little meaning for most of us, but not for the foreign governments that hold our bonds. The BRIC countries, along with OPEC, are quietly preparing a currency alternative to the US dollar. They cannot shoot themselves in the foot by acting too swiftly, less the US reserves they hold drop precipitously. But a replacement for the US dollar is in the making, and when it arrives, or more likely in anticipation of it, our interest rates will have to rise. This will stall any recovery that may be in progress. Another impediment to any recovery, speedy or otherwise, is the uncertainty surrounding the Fed's ability to stabilize the dollar. Those trillions being pumped out will eventually have to be mopped up, but by whom and with what? Thus the market sees inflation ahead while the country still struggles with its recession, an early symptom of stagflation. This fear will continue to haunt the market until Mr. Bernanke clearly explains his strategy for turning off the money spigot and mopping up the excess.

We see the market bouncing around its present level with increasing volatility, and expect that any piece of sudden bad news could take it right back down to the 6,500 level, despite the helping hand of the U.S. Treasury team. Thus we suggest that preservation of existing capital be your primary goal. Take profits when and where you can. Use these 3-digit leaps to increase your cash.

Convert portfolio holdings that have pierced or surpassed their Exit Zone. There will be plenty of occasions to re-invest it, restoring your portfolio holdings at lower prices, i.e., when they are in or below their Entry zone. Do not fall prey to "buy and hold" - it is not a strategy. Use the E-Zone System for your strategy.

With best regards,
Fritz H.

Dear Fellow Investor,

Over our years of operation, many of you have requested charts based on technical analysis indicators to use in conjunction with your E-Zone Charts.

We are pleased to announce that we have made an association with Windchart.com and their T-A charts are now available for you on a page with your E-Zone chart. See them here!

This improvement comes to you with no additional cost, though we suggest you might give a contribution occasionally to Windcharts for making this possible.

Please let us know how this addition is working for you - - - your feedback is very important and extremely valuable as we strive to keep improvements flowing.

With best regards,
Fritz H.
May 22, 2009

Dear Fellow Investor,

Back in January we wrote about TriQuint, (An Opportunity to Rebuild Lost Capital, Jan. 26, 2009 ) suggesting it could be a place to park some capital while the market decided which direction it was heading. Our own expectations were for the S&P, which was then at 836.57, to drop to something between 700 and 600, which it did, hitting a low of 676.53 on March 9. At the same writing, TQNT was priced at $1.99, and we did not see much further downside risk there, tho it did hit a low of $1.94, also on March 9 - - - did somebody say something about the Ides of March?

We still see TriQuint Semi as an excellent long-term investment for the following reasons:

Cash Flow from Operations has remained positive over the last 2 quarters;
In spite of losing $15.6 mil in the 1st Qtr, they still were cash flow positive to the tune of $6.4 mil;
R and D spending has held steady over the last 4 quarters;
R and D has exceeded Selling, General, Admin Expenses over the last 4 quarters;
Selling, plus G & A, has declined by 20% Sept, 08 thru March, 09;
No Long-term Debt and no Short-term Debt = NO DEBT;
Excellent cash position: Current ratio = 4.15 to 1;
Institutions baled, but Insiders bought (and with cash, not options);
Not overly dependent on Defense contracts - - only 14% of Sales Qtr ending Mar 31, 2009

Yes, they took a bath in the last quarter of 2008, as did the market in general. But they have tightened operations, taken control of their cash, and continue to carve out a niche for themselves inside a fast-growing sector of the communications industry.

<<<Our business strategy is to provide our customers with high-performance, low-cost solutions to applications in the handset, networks and defense & aerospace markets. Our mission is, "Connecting the Digital World to the Global Network" and we accomplish this through a diversified product portfolio within the communications and defense & aerospace industries.>>>

With all this being said, TQNT continues to be volatile, but still a worthwhile addition to a long-term growth portfolio. Current price is just slightly over Book Value of $3.486. Use your own due diligence, and make certain you are not buying while price is in an Exit Zone.

If you are not using the E-Zone System to assist you in all the recent volatility, you are battling this market badly handicapped. With matters as serious as they are right now, you should be using a Gold membership to protect your entire portfolio: to know the Exit Zones for those stocks that are extremely volatile and offer swing trade opportunities; and to know the Entry Zones for those stocks you want to average down on or buy again for another swing trade. (Quarterly and Annual categories offer the best savings, and of course, you have the protection of our satisfaction guarantee: a full refund in the first 30 days if you are not completely satisfied.) Order now!

PS: For those less inclined to make any long-term investment these days, but still seeking a way to "grow the portfolio", we suggest using Tri-Quint's volatility to swing or day-trade for those short term profits that can rebuild capital in shrunken portfolios. TQNT has a beta of 2, strong daily volume, and a price of less than $5, all of which makes it an excellent trading vehicle. See Day Trade

We wish you much success in the turbulent days ahead.
Fritz H.

Dear Fellow Investor,

Unless you were totally in cash and contras, your portfolio is probably a mass of vertical blinking red arrows tonight. And this means it is time to begin taking some profits. So scan your holdings - - - put some cash aside. It is not often the market gives us such an opportunity.

What we saw today, a Dow rise of almost 500 points, is obviously an exogenous event, in all probability enhanced with some extra help from the Plunge Protection Team, that invisible Fed/Treasury group with unlimited power to "support the market". Could it possibly be that the Obama team wanted some euphoria in place for the President’s press conference on Tuesday night, or would that be too cynical?

Yes, Geithner unveiled his plan today to relieve banks of their toxic assets, now termed "legacy assets" in Obama-speak. But the devil remains in the details. Who takes how much risk? How will profits, if any, and the sure-to-be losses get shared? How will the Fed control the inflation that is indelibly etched into these loans, bail-outs, joint ventures, etc? Will Congress change the rules after the game has started? In the face of our on-coming inflation, how soon and how fast will foreign lenders begin trading our Treasury notes for a more stable currency?

The world is waiting, but the answers will not come quickly. Therefore, be prepared to see more downturns, though not the magnitude of today’s move. Instead, we expect the markets to remain volatile (watch the VIX level) while drifting back down and re-testing previous lows (Dow 6400, 650 for S&P 500).

We are being given an opportunity to reclaim capital and to restructure our portfolios, so make the most of it. Use the Exit Zones and the Entry Zones to reposition yourselves. Average down where prudent. Get some assets into so-called anchors to windward (contras like SDS, commodity ETFs, etc).

Above all, do not act in panic. With the E-Zone System you have a tool to help you make rational decisions.

We wish you the best of success.
Fritz H.

Dear Fellow Investor,

That ancient adage, "Beware the Ides of March", remains a very valid warning today. In spite of last week's resurgence, the market is still over-stressed, and most prognosticators are calling the rise just a rally in a bear market that has not seen its end.

Too many factors exist to let our hopes run too high. The list is endless, but here are just a few:

Toxic paper remains on bank balance sheets, waiting to be reset. Until this major question is resolved, doubt persists about the safety of banks, ratings, and just about anything that is denominated in dollars. Thus market gains such as last week will remain suspect.
Very recently China warned us, with words and with belligerent action in the S. China Sea, that it has major concerns about the safety of all the IOU's we have given them. At some future point these will have to be redeemed or rolled-over. The US cannot reneg on its debt. Thus, higher interest rates are on the horizon and are inevitable.
Political turmoil continues on all continents: Eastern Europe, Iran, the Afgan/Pak area, Middle East - - - and now Russia is making noises about bomber bases in Cuba or Venezuela. What next?

Eventually President Obama will run out of words that can continue to prop up our hopes. Sooner or later the electorate is going to expect results, and then will have to face the reality that their dreams are not going to come true as quickly as they had hoped. This realization will take a while to filter its way through the fog of weekly, almost daily, pronouncements from the Administration team. But as it does, fears that were dormant will be re-born, and hopes that were high will shrink. The net effect will be a further decline, not only in our market, but in those across the world.

Therefore, we urge you to treat these sudden market jumps as gifts. Use them to take some money off the table when you find vertical red arrows (stocks in your portfolio that have climbed over the top of their Exit Zone). There will always be time to re-deploy that cash as prices recede.

As serious as matters are right now, we urge you to protect your entire portfolio.

Those of you who prudently moved to cash should be using the E-Zone System to find profitable re-entry points for those stocks you want to rebuild. However, do not be too anxious to average down. Wait until the Entry Zone has leveled out (does not slope downward) and the short term trend line is positive. We expect volatility to remain high over these next months due to continuing uncertainty here and abroad. Thus there should be ample opportunities to adjust your portfolios. Be patient. Do not act in panic.

With best wishes for brighter days ahead,
Hottinger Admin Team

PS: Ask your broker to provide the E-Zone charts for you on his website. This program is available for him, and the arrangement could save you both time and money.

Dear Fellow Investor,

This is being written on March 5, at 3:15 p.m. ET, as the Dow continues its downward glide/slide to approach the 6,500 mark we envisioned just days ago.

This writer has been investing, trading, and writing about the markets for over two decades, and has always refrained from including political remarks in his comments.

Today, in the face of our current situation, that policy is being jettisoned. It is this writer's humble belief that while the current market situation was conceived, birthed, and nurtured during a Republican administration, it is now fear- - - fear of the changes promised us by President Obama that is keeping the market from stabilizing.

On March 4, the market rose 149 points, not totally unexpected after 5 consecutive down days. How much of this rise was due to euphoria, or to the averaging-down disciples, or to the Fed/Treasury Plunge Protection Team is anyone's guess.

What should be clear to all investors today is the fact that this market still has a long way to fall. We do not expect it to bottom until the general public comes to a full and complete understanding of just how much "nationalization" our industries and society will suffer. (If "suffer" is too pejorative, substitute "incur" or "be blessed with").

In the face of such a major uncertainty, (be reminded that markets DO NOT like uncertainty) investors should be prepared to take money off the table on any advances, and to re-invest only when a floor has finally been established.

Though we made an earlier prediction of the Dow hitting 6,500, it was not expected to arrive so soon. On Feb 6, it closed at 8,280. Today it tested the 6,500 level with a low of 6,546. Having dropped some 20% in just 18 days of trading, now we will not even venture a guess as to what the number will be by the time the fat lady has finally sung.

The future is not bright. There is more turbulence to come. We urge all investors to protect the capital they have left. Buy-and-hold is NOT your friend! Use the E-zone System to move to cash when the moment permits. Those who are more risk-oriented might want to restore lost capital by swing-trading a contra like SDS, again using the E-Zone System for the entry and exit points.

We remain convinced that the underlying strength and wisdom of our society, which has produced untold wealth in ideas as well as money, will eventually prevail. We just do not know when it will begin to function again. Thus these reluctant words of caution. Fritz H.

Dear Fellow Investor,

Tonight you are undoubtedly looking at a screen full of downward-pointing, blinking green arrows.

Much of your portfolio may now be resting below individual Entry Zones.

Just a word of caution: wait until the bottom of the weekly Entry Zone has turned upward prior to any buying.

These market conditions are unusual, to say the least. And any turn-around will be very slow in coming.

Nonetheless, more than a STOCK MARKET, it is a MARKET OF STOCKS. So continue to watch your individual holdings.

Average down where prudent. Get some assets into so-called anchors to windward (contras like SDS, commodity ETFs, etc).

You might also consider some Swiss holdings like EWL, SWZ.

We wish you much success in these very turbulent times.

Hottinger Admin

Dear Fellow Investor,

Almost 7 years ago the HottingerSignals E-Zone System was launched with one major intent: offer investors an alternative to buy-and-hold.

The idea was born in the tears of my daughter, who had sustained a major 5 digit loss in a portfolio that was being managed by an advisor. When I asked her what advice she had been given, he had been telling her, "Just hold on." Some of those stocks still are not back to square one, and probably never will be.

It is our firm belief that buy-and-hold is not a strategy.

In 1981 Burton Malkiel wrote a second edition to his famous book, A Random Walk Down Wall Street, first published in 1973. In the original, he proclaimed that stock timing could not work because all facts are already known and priced into the market. Thus his famous "efficient market theory". In his update, he concedes that markets are not always 100% efficient, and declared himself just a "semi-strong random walker". In other words, there are times to buy and there are times to sell.

More recently, Chuck LeBeau, writing in SFO Magazine (Feb, 2009 issue) said: "The most obvious problem with buy-and-hold is that it is not a strategy at all. It is, in fact, the absence of any logical plan to protect profits and limit losses. A buy-and-hold approach sacrifices any semblance of control and relies on luck and hope rather than planning and control." Thanks, Chuck, - - - we could not have said it any better.

Our reason for offering you these observations is that we expect much more downside to the market, with the Dow testing 6,800 and the S&P 500 eventually reaching the 680 - 700 range.

A bit of history:: Week of 12/27/1999 Dow hits high of 11,497; Week of 09/17/2001 Dow hits low of 8,235; Week of 09/30/2002 Dow hits low of 7,528; Week of 09/25/2006 Dow hits high of 11,679 (7 years to recover); Week of 10/01/2007 Dow hits high of 14,066; Week of 02/13/2009 Dow closes at 7,850.

If you have not already done so, we hope you will pledge to take immediate control of your investments. Do not sacrifice them to luck and hope - - - use the E-Zone System. It can be an extremely useful tool as you become familiar with the entry and exit zones for each of your holdings.

With matters as serious as they are, you should be using a Gold membership to protect your entire portfolio, and to follow stocks of interest. There will be plenty of bargains in days to come, but you do not want to buy when price is in the Exit Zone. So take control tonight. Develop your strategy and put it to work.

Order right now!

(Quarterly and Annual categories offer the best savings, and of course, you have the protection of our satisfaction guarantee: a full refund in the first 30 days if you are not completely satisfied.)

We wish you much success in the turbulent days still ahead.

Hottinger Admin Team

PS: Ask your broker to provide the E-Zone charts for you on his website. This program is available for him, and the arrangement could save you both time and money.